Governor signs measure legalizing intrastate crowdfunding

Intrastate crowdfunding is now legal in Oklahoma after Governor Kevin Stitt signed Senate Bill 568 on Monday.

The measure, authored by Sen. John Michael Montgomery, R-Lawton, and Rep. Kyle Hilbert, R-Bristow, allows small startup businesses to raise capital through crowdfunding, which is the practice of funding a venture by raising small amounts of money from a large pool of people.

“This measure allows investors of all sizes to participate in investing in Oklahoma businesses,” Montgomery said. “Allowing our small businesses to tap into capital investments in this capacity will be a boost to our state’s effort to diversify our economy. I’m thrilled we were able to see this measure to the finish line, and I thank the governor for his support.”

Under the bill, sales or offers to sell a security are exempt from the Oklahoma Uniform Securities Act of 2004 if:

• The issuer is a corporation or business residing and doing business in the state, the purchaser is a resident of the state, and the transaction meets the requirements of the federal exemption for intrastate officers;
• Sales are limited to $5 million, and the aggregate value of securities sold by an issuer to any person doesn’t exceed $5,000, unless the purchaser is an accredited investor;
• Commission or remuneration is not paid or given to a broker-dealer or agent; the issuer files quarterly and fiscal year-end reports to the Oklahoma Department of Securities; and
• The issuer holds funds in an escrow account.

“Senate Bill 568 cuts red tape and allows greater opportunities for start-up business growth in our state and for Oklahomans to invest in these home-grown companies,” Hilbert said.

The measure went into effect immediately upon signing.